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Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now

Zacks Equity Research
·2-min read

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

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The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Okta (OKTA) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at -$0.23 a share 21 days away from its upcoming earnings release on November 30, 2022.

By taking the percentage difference between the -$0.23 Most Accurate Estimate and the -$0.24 Zacks Consensus Estimate, Okta has an Earnings ESP of 3.16%.

OKTA is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Teradyne (TER).

Slated to report earnings on January 25, 2023, Teradyne holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.75 a share 77 days from its next quarterly update.

The Zacks Consensus Estimate for Teradyne is $0.75, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.22%.

Because both stocks hold a positive Earnings ESP, OKTA and TER could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Okta, Inc. (OKTA) : Free Stock Analysis Report
 
Teradyne, Inc. (TER) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research